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Taxation ROI August 2015 1st Year Paper
Page 1 of 25 Taxation ROI A2015 TXR
Taxation (Republic of Ireland) 1
st Year Examination
August 2015
Solutions & Marking Scheme & Examiner’s Comments
Taxation ROI August 2015 1st Year Paper
Page 2 of 25 Taxation ROI A2015 TXR
NOTES TO USERS ABOUT THESE SOLUTIONS
The solutions in this document are published by Accounting Technicians Ireland. They are intended to provide
guidance to students and their teachers regarding possible answers to questions in our examinations.
Although they are published by us, we do not necessarily endorse these solutions or agree with the views
expressed by their authors.
There are often many possible approaches to the solution of questions in professional examinations. It should
not be assumed that the approach adopted in these solutions is the ideal or the one preferred by us. Alternative
answers will be marked on their own merits.
This publication is intended to serve as an educational aid. For this reason, the published solutions will often be
significantly longer than would be expected of a candidate in an examination. This will be particularly the case
where discursive answers are involved.
This publication is copyright 2015 and may not be reproduced without permission of Accounting Technicians
Ireland.
© Accounting Technicians Ireland, 2015.
Taxation ROI August 2015 1st Year Paper
Page 3 of 25 Taxation ROI A2015 TXR
Accounting Technicians Ireland
1st Year: Autumn 2015
Paper: TAXATION (Republic of Ireland)
Monday 17 August 2015
9.30 a.m. to 12.30 p.m.
INSTRUCTIONS TO CANDIDATES
PLEASE READ CAREFULLY
For candidates answering in accordance with the law and practice of the Republic of Ireland.
Candidates should answer the paper in accordance with the appropriate provisions up to and including
the Finance Acts 2013. The provisions of the Finance Act 2014 should be ignored.
Allowances and rates of taxation, to be used by candidates, are set out in a separate booklet supplied with
the examination paper.
Answer ALL THREE questions from SECTION A. Answer ANY TWO of the three questions from
Section B. If more than TWO questions are answered in Section B, then only the first two questions, in
the order filed, will be corrected.
Candidates should allocate their time carefully.
All workings should be shown.
All figures should be labelled as appropriate e.g. €s, units etc.
Answers should be illustrated with examples, where appropriate.
Question 1 begins on Page 2 overleaf.
The following inserts are enclosed with the paper:
Tax Reference Material
Tax Deduction Card (Question 4)
Taxation ROI August 2015 1st Year Paper
Page 4 of 25 Taxation ROI A2015 TXR
SECTION A
Answer ALL THREE questions in this section
QUESTION 1
Mark and Mindy are married and have one daughter Sally aged 7 years. Mark is 42 years old while Mindy is
aged 40 years. Details of their respective income and outgoings are as follows:
Mark has been a self-employed plumber since 2007. Business declined considerably for Mark in the last few
months of 2014 and he ceased self-employment on the 31 December 2014.
Tax adjusted profits per accounts are as follows:
Year ended 31st October 2012 €62,000
Year ended 31st October 2013 €48,000
Year ended 31st October 2014 €50,000
Period ended 31st December 2014 €3,700
In the year ended 31st December 2014 Mark earned deposit interest from CRB Bank Plc of €142 net of deposit
interest retention tax of 41%.
Mark owns a residential property which has been rented.
Mark received €700 per month in rent from January to June 2014 inclusive and for the remaining months of the
year he received €850 per month. Mark paid €5,900 in 2014 for expenses that relate to the investment property
which are listed below.
Mortgage interest €2,750
Broken window repairs €350
Management charges €1,200
New couch and 3 beds €1,600
Mark contributed €300 a month to a Revenue approved pension scheme and also paid €100 per month for
permanent health insurance.
He also paid €750 medical insurance premiums and incurred the following medical expenses in 2014:
Dental care, check-up and clean €125
Doctors’ visits €1,125
X-ray €200
€200 was reimbursed to Mark under his medical insurance policy for the x-ray and doctor visits.
Taxation ROI August 2015 1st Year Paper
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Mindy is an employee of Shops For Life Limited and she earned €55,000 gross in 2014 and had PAYE of
€18,750 deducted from her salary. In addition to her salary she was paid a bonus of €1,200 on 14 February
2014 based on sales achieved in 2013. In February 2015 she received a bonus of €1,750 based on her sales
achievement in 2014.
In recognition of being such a dedicated worker her employers paid her gym membership for 2014 which cost
€1,070.
Requirement
Prepare an income tax computation for 2014 in respect of Mark and Mindy on the basis that they are jointly
assessed.
For the purposes of answering this question you can ignore PRSI and USC
Total 20 Marks
QUESTION 2
The following multiple choice question comprises of ten parts each of which is followed by four possible
answers. There is only one right answer in each part.
Requirement
Indicate the right answer to each of the following ten parts.
N.B. Each part carries 2 marks
Total 20 Marks
Candidates should answer this question by ticking the appropriate boxes on the special answer sheet which is
contained within the answer booklet.
(1) Indicate which of the following expenses is specifically disallowed by tax legislation:
(a) Staff entertainment.
(b) Customer entertainment.
(c) Increase in specific bad debt provision.
(d) Specific repairs.
(2) Anne commenced to trade as an accountant. She needs to register for VAT when her fee income for
the year exceeds or is likely to exceed:
(a) €35,000
(b) €70,000
(c) €37,500
(d) €75,000
Taxation ROI August 2015 1st Year Paper
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QUESTION 2 Cont.
(3) Mark’s final tax liability for 2013 was €20,000. He paid preliminary tax of €18,000 based on 90% of
this tax liability. He filed his tax return for 2013 on 1 December 2014. His final tax liability for 2013
will amount to:
(a) €21,000
(b) €22,000
(c) €3,000
(d) €4,000
(4) Mary pays an amount of €6,000 under a qualifying covenant to Sam. Sam is a minor child who is
incapacitated and is not a son of Mary’s. Mary earned a salary of €80,000 in 2014 and is single. Sam
has no other income. How much does Mary pay directly to Sam?
(a) €5,000
(b) €6,000
(c) €4,800
(d) €3,540
(5) Tom pays a VAT registered and tax compliant builder €16,000 to build an extension to his home in
2014. The work qualifies for the purpose of the Home Renovation Incentive Scheme (HRI). Tom can
claim a HRI tax credit in total of:
(a) €3,200
(b) €4,000
(c) €1,000
(d) €2,160
(6) The VAT inclusive cost of goods is €15,750. If the VAT rate is 23%, the VAT amount is:
(a) €3,623
(b) €12,805
(c) €2,945
(d) €1,873
(7) On ceasing employment, an employee is entitled to receive from their employer a:
Taxation ROI August 2015 1st Year Paper
Page 7 of 25 Taxation ROI A2015 TXR
(a) Form P35
(b) Form P45
(c) Form P60
(d) Form 11
QUESTION 2 Cont.
(8) VAT records must be kept for a period of at least:
(a) 3 years
(b) 4 years
(c) 6 years
(d) 5 years
(9) For PAYE purposes, which of the following benefits are exempt from any charge to tax under the
benefit in kind legislation:
(a) provision of a loan from employer to buy a house,
(b) provision of a company car,
(c) provision of a mobile phone where personal use is incidental,
(d) provision of private health insurance.
(10) AFT Limited commenced to trade on 1 January 2014. Their monthly turnover for the first six months
was €7,500 per month. From 1 July 2014 they expect the turnover to rise to €8,000 per month. With
regard to registration for VAT, AFT Limited:
(a) Is obliged to register from 1 January 2014,
(b) Must elect to register for VAT in November 2014,
(c) Is obliged to register for VAT from 1 July 2014 when it appears the turnover will exceed the
relevant limit,
(d) Is obliged to register for VAT from 1 October 2014.
Total 20 Marks
QUESTION 3
You are employed as a newly qualified Accounting Technician by a firm of Accountants and have been asked to
draft a letter to a client regarding the following matters:
a) Explain the VAT treatment and rules for exports of goods from Ireland to other EU countries. Outline
the different treatment if the sale is to a registered person or an unregistered person and provide an
example for each. 5 marks
Taxation ROI August 2015 1st Year Paper
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b) Explain the conditions that are necessary in order to receive a credit for fees paid to third level colleges
for education. 5 marks
c) Finance Act (No. 2) 2013 introduced the Start Your Own Business Exemption. Explain the conditions
necessary in order to obtain the relief and how it applies to individuals. 5 marks
d) Explain the conditions necessary in order to qualify for the home-carers tax credit. 5 marks
Total 20 Marks
Taxation ROI August 2015 1st Year Paper
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SECTION B
Answer TWO of the three questions in section B
QUESTION 4
You manage the payroll for AF2 Limited (employer number 9385692W) and the following details refer to two
employees:
Shane Holt 5964986I
Shane has been employed by AF2 Limited for a number of years and is paid monthly.
His monthly salary amounts to €3,700 and he has the use of a company car. The annual benefit in respect of the
use of the car has been assessed at €2,400.
For the month of February 2014 Shane took unpaid leave to look after his daughter Sally while she was ill. He
continued to have the use of the company car while absent from work. Shane returned to work on 1 March
2014.
Alan Smith
Alan started in AF2 on 1st March 2014. As it was his first job he did not have a P45 from a previous employer.
He did not contact his employer and was unable to supply you with his PPS number.
Alan is paid €3,600 per month.
Requirement
(a) Complete the tax deduction card in respect of Shane for the three months January, February
and March 2014. 10 marks
(b) Calculate the total Universal Social Charge due in respect of Shane for the three months
January to March assuming the normal USC cut off points apply. . 5 marks
(c) Calculate Alan’s take home pay for the month of March 2014. 5 marks
Total 20 marks
Taxation ROI August 2015 1st Year Paper
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QUESTION 5
Mary is a self-employed grocer and commenced business on 1 April 2002. She has a small grocery shop on the
main street of Gorey, County Wexford.
The accounts for the period ended 31st March 2014 as prepared by Mary are reproduced below:
Notes € €
Sales………………………………………… 170,432
Opening Stock………………………………. 4,005
Purchases…………………………………… (1) 74,304
78,309
Closing Stock (3,742)
(74,567)
95,865
Add…………………………………………..
Grant for the purchase of a machine (2) 2,500
Interest Earned……………………………… 150 2,650
98,515
Less
Loss on sale of computer…………………... (3) 700
Wages………………………………………. (4) 32,740
Light and Heat……………………………… (5) 5,320
Legal Fees………………………………….. . (6) 7,610
Telephone…………………………………… (7) 2,703
Depreciation………………………………… 10,124
Bad Debts…………………………………… 5,230
Rent…………………………………………. 5,000
Rates………………………………………… (8) 2,000
General Bad Debt Provision……………….. 3,170
Insurance…………………………………… (9) 3,400
Entertainment………………………………. (10) 2,870
Sundry………………………………………. (11) 10,950 (91,817)
Net Profit 6,698
======
Taxation ROI August 2015 1st Year Paper
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QUESTION 5 Cont.
Notes
(1) Purchases
The purchases figure includes €1,750 in respect of a new shelving system purchased in January 2014
and also €6,700 for the sausage machine in note 2.
(2) Grant
In November 2013 Mary recognised that she was losing business to the larger supermarket that had
come into the town the previous year. In order to differentiate herself and claim back some of the
business she decided to purchase a machine to make fresh sausages in view of the customers. The new
machine that she imported from Italy cost €6,700. Her local County Enterprise Office grant aided the
purchase to the tune of €2,500.
(3) Loss on sale of computer
Mary realised in late 2013 that her computer, which cost €800 in 2008, was no longer up to the tasks
she wanted it to perform. It had become very slow and she decided to replace it with a new one. Mary
sold the old computer for €100. She bought a new computer costing €1,200 and this is included in
sundry expenses.
(4) Wages €
Mary paid herself €370 a week as a wage……………………………… 19,240
Staff wages……………………………………………………………..... 7,500
Interest on late payment of tax………………………………………….. 2,400
Preliminary tax payment for Mary……………………………………… 3,600
32,740
Included in the staff wages figure is €750 for the child-minder Mary paid during the summer to look
after her daughter Emily while she was on school holidays.
(5) Light and Heat
Mary pays light and heat for her home and office, 40% of the cost relates to her home.
(6) Legal Fees €
Solicitors fees regarding dispute with neighbour at home………………. 750
Planning Permission for Shop extension…………………………………. 6,110
Solicitors letters to debtor regarding payment of debt…………………... 750
7,610
(7) Telephone
20% of the telephone costs relate to private use. Mary estimates that 10% of the total telephone costs
are in respect of private calls made by staff.
Taxation ROI August 2015 1st Year Paper
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(8) Rates
This figure includes €150 in respect of the local property tax for Mary’s home. The balance is business
rates.
(9) Insurance
The insurance cost is made up of the following expenses: €
Office premises insurance……………………………………………… 1,400
Loss of profits insurance for business…………………………………. 1,320
Private medical insurance for Mary …………………………………… 680
3,400
(10) Entertainment €
Staff Christmas party…………………………………………………… 870
Gifts to customers on their birthdays…………………………………… 800
Mary’s 40th
birthday party for staff and friends………………………… 1,200
2,870
(11) Sundry €
New van for deliveries………………………………………………….. 6,650
New computer…………………………………………………………… 1,200
Advertising……………………………………………………………… 1,500
Stationery………………………………………………………………... 1,600
10,950
Requirement
Compute Mary’s Schedule D Case 1 tax adjusted profits for the year ended 31st December 2014.
Total 20 marks
Taxation ROI August 2015 1st Year Paper
Page 13 of 25 Taxation ROI A2015 TXR
QUESTION 6
Mike owns a hardware shop and he has asked you to prepare the VAT return for the July/August 2014 period.
You have extracted the following details from the records of the business:
Cash collected
Mike has both cash and credit customers. The total receipts are recorded in the cash book and are analysed as
follows:
Months Credit Customers Cash Sales Total Receipts
July 2014 €34,560 €52,415 €86,975
August 2014 €35,450 €49,750 €85,200
Sales Book
Mike issued invoices to credit customers only and these are recorded in the sales book. Details for the two
months are as follows:
Months VAT Exclusive 23% VAT Total
July 2014 €35,600 €8,188 €43,788
August 2014 €26,800 €6,164 €32,964
Purchases Book
Months Total Resale Not for resale Not for resale VAT
23% 23% 13.5%
July 2014 €67,674 €50,120 €2,500 €2,600 €12,454
August 2014 €56,314 €42,000 €1,200 €2,800 €10,314
On examining the purchases book you discover:
A car for Mike’s wife costing €5,500 excluding VAT has been included in the purchases book in July
in error under resale. Mike informs you it should have been included in the not for resale column.
Imports of supplies for resale from France in August costing €8,000 excluding VAT have been omitted.
Petrol costs for Mike’s car amounting to €500 per month (including VAT) have been included in the
not for resale (23%) column each month.
Requirement
Calculate the VAT payable for the July/August 2014 period assuming:
(a) the cash receipts basis applies. 10 marks
(b) the invoice basis applies. 10 marks
Total 20 marks
Taxation ROI August 2015 1st Year Paper
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Appendix 1 Tax Deduction Card (extract)
EMPLOYEE’S DETAILS
Employee’s Name Total Tax Credit
Employee’s Address Total Cut-Off Point
Works/Payroll No.
PPS Number Tax Rate 1 Tax Rate 2
Tax Year
EMPLOYER’S DETAILS
Employer’s Name Employer’s Number
Date of Commencement Date of Cessation
Month Date of
Payment
Gross Pay (less
superannuation)
this period
Cumulative
Gross Pay
to Date
Cumulative
Cut-Off
Point
Cumulative
Tax Due at
Tax Rate 1
Cumulative
Tax Due at
Tax Rate 2
Cumulative
Gross Tax
Cumulative
Tax Credit
Monthly
Cumulative Tax
(cannot be less
than 0)
Tax
Deducted
this Period
Tax Refunded
this Period
1 3,300.00 275.00
2 6,600.00 550.00
3 9,900.00 825.00
PPSN:
5964986I
Shane Holt
39,600
3,300
5964986I
20%
AF2 Ltd
9385692W
2014
41%
Taxation ROI August 2015 1st Year Paper
Page 15 of 25 Taxation ROI A2015 TXR
1st Year Examination: August 2015
Taxation ROI
Suggested Solutions
and
Examiner’s Comments
Students please note: These are suggested solutions only; alternative answers may also be deemed to be correct
and will be marked on their own merits.
Statistical Analysis – By Question
Question No. 1 2 3 4 5 6
Average Mark (%) 55 55 31 47 68 37
Nos. Attempting 153 154 149 105 138 61
Statistical Analysis - Overall
Pass Rate 59%
Average Mark 50%
Range of Marks Nos. of Students
0-39 35
40-49 28
50-59 56
60-69 21
70 and over 14
Total No. Sitting Exam 154
Total Absent 44
Total Approved Absent 6
Total No. Applied for Exam 204
General Comments:
Students did well overall. In general narrative questions were poorly answered and lacked
depth. Students need to revise VAT and payroll. Income tax and tax adjusted profit calculations were
in the main well answered.
Taxation ROI August 2015 1st Year Paper
Page 16 of 25 Taxation ROI A2015 TXR
Examiner’s Comments on Question One
Solution 1
Income Tax Computation 2014
Mark
€
€
Total
Marks
Allocated
Case 1 (working 1) 45,367 2
Less: Pension
-3,600
1
41,767
Case IV
€142 /59 240 1
Case V (working 2) 5,687 0.5
Schedule E Mindy Salary
55,000
0.5
Bonus 2014 1,750 1.5
Gym 1,070 1
105,514 0.5
Gross Income
Less: Allowances/Reliefs
Permanent Health
Insurance
-1,200
0.5
Taxable Income
104,314
Tax €65,600 x 20% = 13,120.00 1
€240 x 41% = 98.4 1
€38,474 x 41% = 15,774.34 28,992.74 1
Less: PAYE paid 18,750.00 0.5
The answers to this were mixed with sopme students scoring very well and others poorly. This was a
computational question concentrating on joint assessment and a self-employed individual and a PAYE spouse.
Areas where marks were lost included:
Case I calculation
Leaving out Permanent Health Insurance
Bonus
Gym membership
Incorrect tax rates
Tax credits
Taxation ROI August 2015 1st Year Paper
Page 17 of 25 Taxation ROI A2015 TXR
Workings
Working 1 Case I
Final year 2014
1/1/14 – 31/10/14 €50,000 x
10/12 = €41,667
1/11/14 – 31/12/14
€3,70
0
Total
€45,36
7
Working 2 Rental
Case V Income
(700x6)+(850x6
)
€9,30
0
1
Less: Repairs -350 1
Management
charges -1,200
1
Mortgage
interest
-2,063 -3,613
1
2,750 x 75%
5,687
Total 20
Examiner’s Comments on Question Two
Married Credit
3,300.00
0.5
PAYE Credit 1,650.00 0.5
Medical expenses €1,125 20% 225 1
DIRT €240 x
41% 98.4 -
24,023.40 1
Tax Due 4,969.34 1
Taxation ROI August 2015 1st Year Paper
Page 18 of 25 Taxation ROI A2015 TXR
Solution 2
Total
Marks
Allocat
ed
(1) B 2
(2) C 2
(3) A 2
(4) C 2
(5) D 2
(6) C 2
(7) B 2
(8) C 2
(9) C 2
(10) A 2
Total 20
This question was the multi-choice question and overall students scored well here.
Taxation ROI August 2015 1st Year Paper
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Examiner’s Comments on Question Three
Solution 3
A Exports of goods to other EU Countries
Total
Marks
Allocated
The Irish VAT rate depends on whether or not the customer is registered for VAT
in the other EU country. The zero rate of VAT can apply to goods supplied to 1
VAT registered persons provided that the Irish supplier obtains and quotes the
VAT registration number of the EU company on the invoice issued. For example
a computer is sold by a VAT registered person in Ireland to a VAT registered
person in Germany. The Irish supplier will obtain the German VAT registration
number and will charge 0% Irish VAT to the German customer.
1.5
The VAT rate applicable to sales to unregistered (private) persons in other EU
countries will generally be the relevant Irish VAT applicable to the item. 1
For example an Irish food supplier sells a hamper of chocolate and biscuits to a
private customer in the UK. Irish VAT of 23% will be charged to the UK
customer. 1.5
B Credit for Fees Paid for Third Level Education
Total
Marks
Allocated
A tax credit is granted for qualifying fees paid for certain third level courses. In
order to qualify the following conditions must apply:
The course must be provided by an “approved college” 1
The fees are paid to attend an “approved course”. To qualify as an approved
course it must be a full time or part time undergraduate course of at least 2 years
or a postgraduate course of at least 1 year but less than 4 years.
1
The qualifying fees relate to tuition fees only. Tax relief is not available for
registration fees or exam fees paid.1
Tax relief is not available for the first €2,750 of fees paid in respect of full-
time course(s), or the first €1,375 in respect of part-time course(s) for the year of
assessment 2014. The maximum amount on which tax relief is allowed is €7,000
1
This question was a narrative question and tested students understanding of certain aspects of tax including
VAT, tax credit for Third level fees, Start Your Own Business Exemption and the home carers credit. Like in
the May sitting students often failed to expand on their answers and did not provide enough detail. The VAT
section and the third level fees and the home carers credit were answered corrected in most cases but lacked
detail in order to score a good mark. Most students did not answer the Start Your Own Business Exemption
correctly.
Taxation ROI August 2015 1st Year Paper
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The relief is available for fees paid by the taxpayer on behalf of any other
individual.1
The amount of the credit granted is the lower of:
(1) Amount of fees paid x 20%, or
(2) €7,000 x 20%
C. Start your Own Business Exemption
Total
Marks
Allocated
Finance Act (no. 2) 2013 introduced an exemption from Income Tax for an
individual who sets up a new business as a sole trader/partnership (i.e. an
unincorporated business) between 25 October 2013 and 31 December 2016. 2
The individual will qualify for relief if the business has been set up following a
period of at least 12 months unemployment during which time the person was in
receipt of a payment or credit from the Department of Social Protection. 2
The exemption allows relief from Income Tax up to a maximum of €40,000 per
annum for two years. The relief applies to Income Tax only. PRSI and USC will
continue to be payable on any profits made. 1
D. Home Carer Tax Credit
Total
Marks
Allocated
This is a tax credit available in the situation where one spouse works at home
looking after young children or an elderly dependent. The home carer can earn
some income outside of the home and still qualify for the credit or part of the
credit. The following conditions must be satisfied to qualify for the relief:
1
1. The couple must be married or civil partners and jointly assessed 1
2. The home carer must care for at least one dependant person. 1
A dependant person is:
A child for whom the claimant is in receipt of child benefit
A person aged 65 years or over
A person who is permanently incapacitated 1
The dependant must normally reside with the married couple or civil partners.
However, a relative may qualify if they live within two kilometres of the
claimant and if there is a direct system of communication between the two
properties.
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3. The home carer must have income of less than €5,080 a year to qualify for
the full credit of €810. Where the income exceeds €6,700, the tax credit cannot
be claimed. 1
Total Marks 20
Please see the end of the document for Solution 4
Examiner’s Comments on Question Five
Solution 5
Mary adjusted profit
computation for the year ended
31 December 2014.
€ Marks
Allocated
Per Accounts 6,698 0.5
Deduct
Grant 2,500 1
Interest earned 150 -2.65 1
4,048 0.5
Add General bad debt provision
scheme 3,170
1
Shelving 1,750 1
Machine 6,700 1
Loss on computer 700 1
Computer 1,200 1
Drawings 19,240 1
Interest on late payment of tax 2,400 0.5
Preliminary tax 3,600 1
Child-minder 750 1
Light and Heat 40% x 5,320 2,128 1
Solicitor’s fees dispute 750 0.5
Extension legal costs 6,110 0.5
This question was particularly well answered with students understanding the addbacks. In some cares errors
were made on the deductions.
Areas where marks were lost:
Bad debt provision
Machine
Entertainment
Taxation ROI August 2015 1st Year Paper
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Telephone 20% x 2,703 541 1
Depreciation 10,124 0.5
Rates 150 1
Insurance 680 1
Gifts 800 1
Party (40th
) 1,200 1
Van 6,650 68,643 1
Adjusted Profit 72,691
Total
Marks 20
Examiner’s Comments on Question Six
Solution 6
Cash Basis
Invoice
Basis
€ Total Marks €
Total
Marks
Allocated Allocated
Cash Sales
(52,415+49,750) 102,165 2 102,165 2
Debtors receipts 70,010 1 Credit sales
(43,788+32,964) 76,752 1
172,175 178,917 1
VAT Content 32,195 1 33,456 1
France Purchase -8000 1,840 1 1,840
VAT 23% 34,035 1 35,296 1
VAT On Purchases 23% 13.50%
July (50,120+2,500) x 23% 12,103 351
(2,600x.13.5%) 0.5
August (42,000+1,200) x
23% 9,936
378(2,800 x
13.5%) 0.5
22,039 729 Car 5,500 x 23% -1,265 1
Supplies 8,000 x 23% 1,840 1
Petrol (500 x 2 x23/1 23%) -187 1
22,427
This question was the least popular and those that answered it did not completely understand the VAT
computation rules. VAT is an area that would benefit from more revision.
Taxation ROI August 2015 1st Year Paper
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a)
VAT on outputs 34,035
VAT on inputs 23,156 (22,427+729) 1
VAT payable 10,879 1
b)
VAT on outputs 35,296
VAT on inputs 23,156
(22,427+729) 1
VAT payable 12,140 1
Total Marks 20
Taxation ROI August 2015 1st Year Paper
Page 24 of 25 Taxation ROI A2015 TXR
39,600
20%
Solution 4
Appendix 1 Tax Deduction Card (extract)
EMPLOYEE’S DETAILS
Employee’s Name
Shane Holt
Total Tax Credit
3,300
Employee’s Address Total Cut-Off Point
Works/Payroll No.
PPS Number 5964986I
Tax Rate 1 Tax Rate 2 41%
EMPLOYER’S DETAILS
Tax Year
2014
Employer’s Name
AF2 Ltd Employer’s Number
9385692W
Date of Commencement Date of Cessation
Mth Date of
Payment Gross Pay (les superannuation)
this period
Cumulative Gross Pay
to Date
Cumulative Cut-Off
Point
Cumulative Tax Due at
Tax Rate 1
Cumulative Tax Due at
Tax Rate 2
Cumulative Gross Tax
Cumulative Tax Credit
Monthly
Cumulative Tax (cannot be
less than 0)
Tax Deducted
this Period
Tax Refunded
this Period 1 3900
0.5 marks 3900 3300 660.00
0.5 marks 246.00
0.5 marks 906.00
0.5 marks 275 631.00
0.5 marks 631.00
0.5 marks 0
2 200
0.5 marks 4100 6600 820.00 0.5
marks 0 0.5 marks 820.00
0.5 marks 550 270 0 361.00
1 mark
3 3900
0.5 marks 8000 9900 1600.00
0.5 marks 0 0.5 marks 1600.00
0.5 marks 825 775 505
0.5 marks 0
Taxation ROI August 2015 1st Year Paper
Page 25 of 25 Taxation ROI A2015 TXR
Form completion 1.5
Other marks as above 8.5
Total 10
(b)
January to March 2014
USC
2,508.99 x 2% = 50.18 1
1,494.99 x 4% = 59.8 1
3,996.02 x 7% = 279.72 1.5
Total USC 389.7 1.5
(c)
Taxable pay €3600
€3,600 x 41% = €1,476.00 1.5
PRSI €3,600 x 4% =
144 1
USC
€3,600 x 7% = €252.00 1.5
Net Pay
3,600-1,476-144-252
=1,728.00 1